Europe Gas: Prices lift on cooler forecasts

Electricite de France SA

17/04/2023 09:53

April 17 (Reuters) - British and Dutch wholesale gas
prices posted small gains on Monday morning as forecasts show
cooler weather this week and next, although this was balanced by
an uptick in wind power output and French LNG send-out. 
    The British within-day contract  TRGBNBPWKD  was up 1.00
pence at 101.00 pence per therm by 0823 GMT and the day-ahead
price  TRGBNBPD1  gained 0.90 pence to 100.00 pence/therm,
according to Refinitiv Eikon data.
    "The temperature outlook for the UK continues to change,
with the latest view removing the 'heatwave' forecast for later
this week," consultancy Auxilione said in its morning report.
    "We now see a continuation of seasonal normal, or just below
it for the remainder of the month, and into May," it added.
    Gas infrastructure maintenance in Norway is affecting flows
to Britain, which were down 16 million cubic metres (mcm) on
Monday.  NG/NO 
    Still, peak wind power generation in Britain is forecast to
almost double to 11.1 GW on Tuesday from 5.8 gigawatts (GW) on
Monday, according to Elexon data.
    Higher wind power generation generally reduces the need for
gas-for-power demand.
    The return of supply from the French liquefied natural gas
(LNG) terminal after the long-lasting strike was also a bearish
factor for the market, Refinitiv analyst Marina Tsygankova said
in a morning note.
    On the continent, the benchmark Dutch May price  TRNLTTFMc1 
was up 0.15 euro at 41.20 euros/MWh.    
    European gas storages were last seen 56.3% full as
injections to replenish supplies for next winter have started,
according to Gas Infrastructure Europe data.
    Norwegian supplies were key to determining how much gas
would be in storage by the end of October, analysts at Energy
Aspects said in their latest gas market report.
    Were gas prices to fall below the break even price with
Brent crude oil, this might incentivise producers to inject
around 21 mcm of gas per day to maintain oil output, instead of
selling the gas as they have been doing over the past year, they
said.
    Another question was whether Norwegian production from
flexible files such as Troll and Oseberg could be deferred into
future years, the analysts added.
    Meanwhile, industrial demand showed signs of recovery,
driven by refining and petrochemical sectors, although potential
permanent ammonia production losses may mean industrial demand
this year could be overestimated, Energy Aspects said.
    In the European carbon market, the benchmark contract
 CFI2Zc1  was down 1.17 euros to 92.67 euros a tonne.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
How much of Europe’s gas storage is filled     https://tmsnrt.rs/3JPbVvW
Russian gas volumes to Europe    https://tmsnrt.rs/3dMnW9G
British and Dutch gas prices    https://tmsnrt.rs/3WLENLe
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Nora Buli in Oslo; Editing by Jacqueline Wong)
 ((Nora.Buli@thomsonreuters.com; (+47) 21 04 05 56; Reuters
Messaging: nora.buli.thomsonreuters.com@reuters.net))